As an energy storage integrator, S&C frequently gets asked about proven and unproven energy storage battery chemistries and the companies that provide them. It’s our job to carefully evaluate new battery technologies. If you use a skilled integrator, detailed knowledge regarding these new chemistries and the companies providing them should be a core competency. Your integrator should be your guide on what you should and shouldn’t do with an unproved technology.

At S&C, we have a process for determining which battery chemistries we should recommend for customer projects. It starts with determining what the customer is trying to accomplish with the system. We then proceed to determining which use cases are most applicable to meet the customer’s objective(s). Once we have all of that established and approved by the customer, only then do we proceed to select the battery chemistry that would best fit the requirements for the project.

Other companies take an exactly opposite approach to chemistry selection. They attempt to force the use of newer technologies, even when the battery chemistry isn’t appropriate for the application. This is a significant and frequent problem in our industry. When it occurs, we think you should ask how they intend to warrant or guarantee the battery should the newer chemistry not live up to its hype. Or worse, the unproven supplier isn’t around long enough to back its warranty.

These companies are gambling with your dollars when they install newer, unproven battery technologies that haven’t been properly vetted. And the most common solution proposed to this conundrum is to buy insurance as protection against the risks. This causes increased project costs. But let’s dig deeper into that. Who’s really taking that risk? Who is paying for the insurance? In both cases, you are. All those issues are passed along to the customer.

Let’s continue along this train of thought. If, after considering all the options, a company is intent on using an unproven technology or an unproven supplier for its battery energy storage needs, it should know its protection options. Your delivery contract cannot protect you if the battery supplier is bankrupt. That means you need third-party protection (i.e. insurance). The types of battery insurance vary considerably, and some batteries aren’t even insurable.

When insurance is offered, there are two primary types of insurance: performance insurance and company insurance. Let’s look at both.

As the name implies, with performance insurance a project owner acquires protection against various potential performance problems. These center around when battery performance doesn’t go as planned, specified, contracted, or advertised. Insufficient chemistry or system performance can cost you millions in lost revenue or savings over the 20-year life of a project. As such, battery selection can make a huge difference in actual versus projected performance for your project(s).

With company insurance, a project owner could insure against the battery company going out of business. If a company warrants its battery for 10 years and during that time it ceases operations, company insurance would guarantee continued warranty support for the system. This type of insurance is likely mandatory for leveraged projects with unproven chemistry suppliers.

From S&C’s significant experience in working on energy storage projects, our contention is this: If you feel like you need to take out insurance against your battery chemistry provider, perhaps that should raise a red flag that you might not want to use them.

Still, we get asked about newer battery chemistries frequently. We’ve done the due diligence on them and we’re prepared to guide our customers through the various alternatives. S&C uses 18 different criteria when evaluating battery chemistries and the companies providing them. Let us help you make a good decision when the time comes…one that doesn’t involve additional insurance policies.

I’d be interested to hear your battery energy storage experiences and whether newer technologies worked well for you. I’d also like to hear if better evaluations might have saved you money in the long run. You can let me know in the comments section below.